As you create your investment plan, look into smarter investments that have less volatility than the stock market. One great option is an Indexed Universal Life Insurance policy (IUL). Unlike traditional life insurance policies that only offer a death benefit, an IUL combines a cash growth account with the traditional life insurance policy. How? An IUL compounds market-linked interest on all cash values paid in that are greater than the term insurance premiums. This gives you access to your principal and profits during your lifetime—or an during retirement. Additionally, since it’s a life insurance product, you don’t pay taxes on the money you withdraw.
What’s especially attractive about IULs is that the cash account portion of the IUL accrues interest based on the upside-returns-only of a market index, such as the Standard & Poor 500. In other words, when the market index drops, you don’t lose your principal. This is what makes them such a safe investment. When the market rises after a previous drop, you continue to accrue new growth without having to rebuild your principal amount.
While anyone can get an IUL, they are ideal for people in the 35-54 age bracket. This allows ample time for the money to grow (the average interest rate on an IUL is six to eight percent). And if you currently have a 401K or IRA, you can roll that money into an IUL. It’s definitely an investment option to check out.